A major difference between defined benefit pension plans and defined contribution pension plans is that
A) In defined benefit plans, the risk of loss is borne primarily by the employer.
B) Accounting for defined benefit plans is much simpler than accounting for defined contribution plans.
C) Employees generally are required to contribute to defined contribution plans but not to defined benefit plans.
D) There is no major difference between the two kinds of pension plans.

Question

Quizplus · Accepted Answer

In defined benefit plans, the employer guarantees a specific retirement benefit amount, bearing the investment risk. In defined contribution plans, the employee bears the investment risk, as the retirement benefit depends on the plan's investment performance.

A Major Difference Between Defined Benefit Pension Plans and Defined